Time running out for lawmakers to avoid shutdown

LANSING (AP) -- Lawmakers were trying Saturday to strike deals on tax increases and measures aimed at lowering health insurance costs for some public employees in an effort to avoid a partial government shutdown.

Democratic Gov. Jennifer Granholm has told about 35,000 of the state's more than 53,000 workers not to report to work on Monday if a shutdown occurs. The remaining workers, mostly related to public health and safety, would stay on the job.

Republicans have pushed Granholm to accept a temporary, emergency budget extension that would give lawmakers more time to craft a longer-term deal aimed at erasing a $1.75 billion deficit in the fiscal year that starts Monday. Granholm has said she won't sign a temporary budget unless she has assurances higher taxes to pay for education, public health and other programs are part of the deal.

Leaders in both the Democrat-led House and Republican-controlled Senate are optimistic a deal will be reached to avoid a shutdown. Negotiations were continuing at the Capitol and the Legislature could vote on final proposals later this weekend.

Negotiations are centered on raising the state's personal income tax rate, now at 3.9 percent, to as high as 4.6 percent. Another possible option is expanding the state's sales tax to some services, although many in the business community are rallying against that proposal.

Other proposals to cut or restrict state spending and restructure the way government handles teacher and public employee benefits also are part of a possible budget deal.

A partial state shutdown would mean most government operations would cease, including gas pump inspections, liquor deliveries, lottery ticket sales, the issuance of driver's licenses and construction on state roads.

A Wayne County judge has ruled Detroit casinos could remain open in the event of a shutdown.